Timing & trends

One of the Best Timers Around Changes His Stock Market Opinion

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Todd Market Forecast for Tuesday March 13, 2012
 
The stock market was higher by a little over 100 Dow points when late in the day, JP Morgan raised its dividend and announced a massive $15 billion stock buyback. There is now anticipation that other banks will follow suit.
 There seemed to be little reason for the earlier rally. Yes, retail sales were perceived as being good, but a lot of that increase was at gasoline stations. The Federal Reserve FOMC meeting and announcement was also basically a non event.
One has to ask, was there sufficient leakage of the JP Morgan announcement to tip the scales toward the upside prior to the announcement.
 Regardless of the reason, the major indices broke out above the resistance zone that we showed in yesterday’s update and this is a bullish occurrence.

Available Mon- Friday after 6:00 P.M. Eastern, 3:00 Pacific.
                 
DOW                                               + 218 on 1550 net advances
 
NASDAQ COMP                          + 56 on 1250 net advances
 
SHORT TERM TREND                         Bullish (change)
 
INTERMEDIATE TERM TREND       Bullish

 
TORONTO EXCHANGE:  Toronto gained all that it lost yesterday and then some. We’ll be changing our evaluation.

Beautiful Beachfront Property at Prices Too Low to Believe

The Property Time Machine

 

“I wish I had a time machine”. Those were almost the first words out of Mary’s mouth when I met her. Her husband nodded in agreement. I did too. Who wouldn’t want a time machine?

I could picture myself going back in time and snapping up Microsoft shares before they became a household name…or priceless Van Goghs, back when the painter, himself, couldn’t even sell one of them…or choice properties in prime locations before they boomed.

And Mary’s mind was on property too. She wanted to buy a beach house where she could retire. She considered Panama and Costa Rica 10 years ago, checking out listings and even traveling through both countries to get a feel for them.

But she decided that her retirement was too far in the future. She left her savings in the bank. Ten years back, her savings would have bought her a beach house in Panama or Costa Rica. But her savings haven’t grown very much, while the cost of beach property in Costa Rica and Panama had soared. Today, she’s priced out of both markets.

But she hasn’t given up her dream of a beach home. She doesn’t want to compromise by buying a home a short drive from the beach. She doesn’t want a tiny studio. She wants a spacious house with ocean views in a beachfront community. She’s worried that she won’t find it anywhere on her current budget.

But she can — and she won’t need a time machine. She simply needs to look to Ecuador…

You see, while coastal property prices in both Costa Rica and Panama rose sharply in the last ten years, Ecuador’s coast was a sleeping giant.

A surge of foreign investors triggered the real estate booms in Costa Rica and Panama. Those foreign investors didn’t make it to Ecuador. So property prices on Ecuador’s coast are pegged to the price that local buyers can afford to pay for a home.

So what we’ve seen on Ecuador’s coast is a slow but steady appreciation in prices rather than a rapid spike upwards. Most local buyers pay cash for a second home, too, so the market isn’t frothy and filled with speculators. Ecuadoreans buy beach homes for personal use. Most don’t buy property to flip or as a buy-to-let investment.

And that means you can still buy a home on Ecuador’s coast for less than half of what you’d pay for a similar property in Costa Rica or Panama. And one location offers the most bang for your buck — in terms of value and appreciation potential.

Ecuador boasts hundreds of miles of Pacific coastline. But we’ve found the sweet spot…a section of coast that we think holds the most promise.

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I first scouted Ecuador’s coast back in 2008. And when I say scouted…I spent a month on the ground. I explored in off-road vehicles and tiny fishing boats. I burned up boot leather to get the real skinny on off-the-beaten-track locations. I spent time in towns where a foreigner was a novelty. I ate in roadside stops filled with local truckers. I poked around every beach, cove and bay I came across.

And at the end of that month I knew I’d found the sweet spot. (You can see it on this map here; it’s between Canoa and Pedernales.) The problem was; it was really tough to get to.

Since that first trip, I’ve lost track of the number of scouting trips I’ve done on Ecuador’s coast. And each time I’ve gone back, it’s been easier to get to the sweet spot.

Finally, in 2011, this piece of coast opened up. It hit a milestone. And it’s now poised for major growth. Already, we’re seeing more local tourists and buyers, mainly from Quito…and growing interest from foreign buyers looking for a second or retirement home.

In January 2011, a new coastal highway opened. It winds its way from Quito, Ecuador’s capital city, through the mighty Andes Mountains. Driving this route, you can’t help but appreciate the mammoth engineering task involved in carving this road through the mountains.

The new road is smooth and easy to drive. It’s much quicker too, cutting the journey time in half. It now takes 3.5 hours to drive from Quito to this section of coast. That makes this piece of coast the closest beach area to Quito.

That’s an important point. Previously, the closest beach area was a town called Atacames. But Atacames is a 6-7 hour drive from Quito…compared to 3.5 hours to get to Pedernales.

I love this piece of coast. It’s got so much to offer. Travel further south on Ecuador’s coast, and the climate gets very dry, with scrubby vegetation. Travel further north, and it becomes sticky and humid. This place is somewhere in between. It’s not bone-dry or shirt-soaking damp. There’s enough rain to keep the hills and forests green and fresh for most of the year.

It’s unspoiled here too: No high rises, no mega-malls, no sprawl of subdivisions. Lack of access has preserved the natural beauty of this coast. Empty beaches run for miles. Howler monkeys call to each other in the forests covering the hills behind the coast. In the bright blue Pacific, giant whales breed and play with their young. Bright butterflies dance in the ocean breeze. Fishermen land their day’s catch and sell it fresh from the boat for $1 a pound.

This coast has everything that Mary wants. She wants natural beaches, forests and lots of wildlife. She wants year-round warm weather. She’d like a low cost of living and lots of locally-grown produce and fresh seafood. She’s not looking for brand-name coffee houses, fast food chains, or fashion malls. You won’t find any of those on this coast. What you will find are raw beauty and low property prices.

One of the nicest residential communities on this section of coast is Jama Campay.

Jama Campay is a small beachfront community of lots, houses and condos. The development sits on low cliffs overlooking the ocean, with forest-covered hills providing a lush backdrop.

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A 20-minute ride from Jama Campay takes you to a town where you can buy groceries and gas, go to the bank, or dine in one of the local restaurants. The restaurants aren’t fancy, but neither are their prices. You can get lunch for as little as $2.

Just south of Jama Campay, there’s a fun town called Canoa. It’s a little Margaritaville with lots of rustic bars, cafes, restaurants and clubs. Its wide beach and good waves attract a young international set of surfers and backpackers.

But Jama Campay contrasts with the party atmosphere in Canoa. It’s tranquil. Most of the buyers are well-heeled locals from Quito. They come here to relax with family and friends. Few rent their homes when they’re not here. They prefer to keep their homes for private use. One owner who is renting is earning $250-$300 a night for their house. There’s a shortage of accommodation on this coast, and that shortage is growing as more tourists visit.

The homes in Jama Campay tick all the right boxes for Mary. They’re a spacious 1800 square feet with an open-plan layout…they offer wide ocean views…and they’re priced at $134,600. You’ll enjoy the wide outside terraces, where you can dine to the sound of the waves…

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And (to tick another box on Mary’s wish list) it’s only a few minutes’ walk from your home to the beach…

I’m going to tell you what I told Mary. Go and take a look at this coast. Sometimes a place will tick all the right boxes on paper. It has everything you want. But then when you go there, it doesn’t feel right for you.

The developer of Jama Campay, Francisco del Castillo, knows this. That’s why he runs chill weekends…mini breaks on this coast that let you check it out first-hand and see if it fits.

Francisco’s team will plan a custom chill weekend for you. They’ll meet you at the airport and drive you down to Jama Campay where you’ll spend a few nights. You’ll see the new road up close…stop for breakfast in a cloud forest town that’s famous for bird watching…and reach Jama Campay in time for an afternoon dip…

Francisco’s team will show you Jama Campay, discuss the different types of property available in the community and help you decide if it’s right for you.

Don’t worry, you’ll get plenty of time to relax and soak up the atmosphere…and before you head back to Quito, you’ll enjoy dinner in Canoa, the fun beach town.

Contact Francisco’s team here to find out more about Jama Campay and to start planning your custom chill weekend.

Regards,

Margaret Summerfield,
for The Daily Reckoning

(Updated) Mark Leibovit’s Daily Stock Comment & A Gold Comment

STOCK MARKET SUMMARY upated after today’s close +  a Gold Comment immediately below saying…. “one of the best gold market timers around, is Mark Leibovit”

Mark SaysTime is running out for the current (stock rally), but the intermediate trend for 2012 is still bullish”

Equities exploded higher yet again today as the news seems to be all good. For the session the Dow was up 217.97 at 13,177.68, the S&P 500 was up 24.86 at 1395.95, and the Nasdaq Composite was up 56.22 at 3039.88. Volume increased over Monday and breadth was strong.

Well folks, in a normal market this would smell like a top. Markets explode higher yet again after a prolonged run – and all the news is GREAT! Retail sales strong, key banks pass stress tests (did anyone expect otherwise?), unemployment is down, 200,000 new jobs were created last nonth, Europe’s problems are on their way to being solved, etc. It seems the ‘wall of worry’ that the market has been climbing is being dismantled brick by brick.

While this latest rally looks suspect from a contrarian standpoint, we must wait for price and volume to confirm any reversals that may develop. Until then, the trend is higher.

Equities opened strong and finished stronger as news of the bank stress tests were released two days early after the Fed announced no change in interest rates with inflation not being a major threat.

Financials exploded higher as the release of the bank stress tests removed an element of uncertainty and forced shorts to cover positions. Also news that JP Morgan Chase is increasing their dividend and initiating a $15 billion stock buyback program brought in a rush of buyers late in the session. JPM closed 7.03% higher at 43.39.

Better than expected retail sales got stocks off to a solid start this morning. February retail sales rose by 1.1% vs. consensus of 1.0%. Excluding autos, retail sales were up 0.9% vs. consensus of 0.6%.

The FOMC opted to leave its fed funds target rate at 0.00% to 0.25%. The statement said that economic conditions, including low rates of resource utilization and a subdued outlook for inflation, are likely to warrant exceptionally low levels for the fed funds rate at least through late 2014.

In individual stock news, Molycorp shares gained 3.2 percent to $30.82.

Shares of Urban Outfitters Inc fell 5.3 percent to $27.95 after the company said it expects margins to continue to be pressured.

———————————————

Canadian News

Canadian equities moved higher after an upbeat FOMC statement and strong U.S. retail sales.

The S&P/TSX composite index gained 109.68 points to 12,537.69 as nine of its 10 main sectors posted gains. Materials stocks sank 0.4 percent on weak gold bullion prices.

Broad market gains were led by energy company Suncor Energy which gained 2.6 percent to C$34.04, and financial company Royal Bank of Canada which gained 2.2 percent to C$58.00.

The Fed didn’t signal any change in its plan to keep interest rates low which stoked optimism about the economy. That in turn put upward pressure on oil and copper prices, which impacted energy and base-metal mining shares.

Mining stocks were strong, led by gains in Teck Resources as its shares gained nearly 3 percent to C$36.53 while First Quantum advanced 3.3 percent to C$21.13.

The dollar was stronger despite all of the hoopla in the equity market. The U.S. Dollar Index was up .243 at 80.133.

Precious metals were lower today as gold sank on liquidation as the risk trade is firmly on at this point. Spot gold was off 27.50 at 1673.30. Silver was off .18 at 33.43, platinum was off 10 at 1684, and palladium was up 1 at 701.

Copper posted strong gains on the great news throughout the session as the May contract settled .0650 higher at 3.9025.

Crude oil settled 0.37 higher at 106.71.

Good Night.

Gold Comment from Dan Dorfman of Trim Tabs Lauding Mark Leibovit’s Timing Excellence (and current caution)

TrimTabs Money Blog

Gold Bulls Fear More Grief, Maybe a $200 Dive

By Dan Dorfman

Don’t get suckered! There are times when gold can turn into fool’s gold. This could be one of those times. In other words, gold stands out as an exciting investment for the long run, but looms as a potential dog of an investment for the short run.

Those essentially are the cautionary suggestions from a couple of outspoken and generally buoyant long-time gold bulls. More specifically, they’re saying if you’re tempted to take a flier on the precious metal in the hopes of buying it on the cheap after its wicked $130-an-ounce decline over five days that sent it skidding to around $1,660, your timing could be for the birds.

Their basic view is that the recent thunderstorms in the gold market-largely a reflection of a hint from Federal Reserve chairman Ben Bernanke that further quantitative easing might not be in the cards, Greek debt fears and a firming of the greenback-may be far from over. The inference is clear, namely gold could head down again before it heads up.

Our other wary long-term gold bull, one of the best gold market timers around, is Mark Leibovit, editor of the Arizona-based Leibovit VR Gold Letter. His view: gold shares are weakening and we need a confirmation of a bottom before jumping back in. “I would step aside till the dust settles,” he says. Another current negative, he notes, is the seasonal factor, a reference to the fact that gold often tops out in February or March, remains stagnant for about 90 to 120 days and then resumes its advance in the late summer.

For the longer term, though, Leibovit, who sees a full-scale confrontation between Israel and Iran before the end of May, says gold remains on a buy signal, but he emphasizes he would only buy the volatile metal here on weakness and cautions “it’s definitely not for the faint of heart.”

Before year end, though, he sees a gold reversal, with the metal, reflecting all the well known positive fundamentals, in particular global round-the-clock money printing, climbing to $2,000 or more. Among his favorite gold plays are Canadian Mapleleaf coins, Central Fund of Canada and a Canadian exchange-traded fund backed by the Royal Canadian Mint, an ETF that trades on the Toronto Stock Exchange under the symbol MNT and enables its investors to take delivery of their physical assets.

Marks Stock Comment before today’s opening

STOCKS – ACTION ALERT – SELL (Time is running out for the current rally, but the intermediate trend for 2012 is still bullish)

Today is both ‘Turnaround Tuesday’ and FOMC day likely triggering a rally following a down day on Monday. I have unfulfilled upside targets in the S&P 500 between 1395 and 1445, but felt a shakeout back to first 1323 and possibly 1270 were doable this Spring. We may still rally into the end of the month or early April and I could be early in my SELL signal. One of the key indexes to watch is the Russell 2000 which displayed several short-term sell signals in my work in February ahead of the early March sell-off. It is now rebounding and a breakout above 833.02 (the February 6 high) especially on volume would likely be coincident with new rally highs elsewhere. We are also watching the key Dow Transports which also topped out in early February at 5384.15, now 5144.28. New market highs, however, does not negate the chances of still seeing a sharp correction in the Spring, but this time coming from higher ground rather than current levels.

Screen shot 2012-03-13 at 5.27.20 PMThe Dow Daily below:

Screen shot 2012-03-13 at 5.35.28 PM

Tse Daily Chart 3/13/12

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9 Key Points for the Gold & Silver Markets

With continued volatility in the gold and silver markets, today King World News reached out to 40 year veteran John Hathaway.  Hathaway is the prolific manager of the Tocqueville Gold Fund and he has achieved a 5-star rating from Morningstar.  Hathaway sent KWN, exclusively, an outline of 9 key points in the gold and silver markets.  Here is a portion of one of the 9 key points (all 9 points below):  “The fact that gold has survived the negative news flow from the monetary and economic front is encouraging.  If gold can withstand the apparently changing narrative that had underpinned a bullish stance on gold, it will be a sign of enormous strength.”

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Know Your Timeframe When Timing Your Trades

This past week I read another excellent article by Jeremy Grantham which included several “tips” for retail investors…the tip that really got my attention was, “Stock market opinions must be read with a careful understanding of the time period being used.” His article reminded me how important it is for me to trade the same time horizon as my analysis….because if I’m not properly connecting the time frame of my analysis to the time frame of my trading….and vice versa….I’m going to be losing money. In fact, I think any time I’ve “struggled” with trading it’s because my short term trading strategies have been based upon longer term analysis.

victor

“Food, Feed & Fuel” – Canadian Farmland Investing Explained

Canadian farmland continues to receive favorable attention from alternative investors. We believe it stems from some unique and increasingly sought after characteristics – low volatility, low correlations to traditional asset classes, high correlation to inflation, superior risk adjusted returns, linkage to emerging market growth with limited political risk, reliable cash-flow generation, if structured correctly, minimal counter-party risk and, in Saskatchewan in particular, a margin of safety.

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